Haisler: Politics and real estate can be a combustible mix

Published: Thursday, Nov. 14, 2013 5:30 a.m. CDT

Think of a dam holding back water. The dam works really well for many years, but then a drip appears and someone notices it.

Naturally, we want to fix the dam. So we call in the repairman to patch it. We get up close and look at the patch and it’s holding well – it is no longer dripping. Problem solved. At least until we start walking away and notice water pouring out of the other side of the dam. So we call the repairman back to fix the new hole. This time he asks us, “where would you like me to get the concrete from?” That’s a strange question, prompting us to ask him, “Where did you get the concrete from to patch the leak?” The repairman points to the new hole.

What does this have to do with real estate? This is the story I tell new agents about the relationship between politics and real estate. I want to teach them that the system is fragile. Solutions to new problems don’t come easily. Everything relies on something else for the real estate transaction to work. Most specifically, we talk about elected officials. I truly believe that no politician takes office with the goal of making things worse. They are all well-meaning, good-intended people who want to help make peoples’ lives better. Maybe I’m naïve, but I do believe that.

In my job, I interact with elected officials regularly. Sometimes they call my office to discuss topics of concern and to get a real estate perspective on the topic. Sometimes our Realtor team, including the National Association of Realtors and the Illinois Association of Realtors, call politicians when we hear about issues being discussed by someone’s office – often an elected official or local unit of government. We engage the conversation and offer insight.

A typical situation might be that a constituent has an issue (a leak) and brings it to the attention of their local official, as they’re supposed to. The local official finds the situation unfair, wrong or otherwise in need of change and decides to draft a bill (concrete) to resolve the matter. Sometimes, however, we find in the draft that the proposed solution has unseen consequences that would only create bigger problems (a hole in the dam). In these situations, we work closely with the official to tweak or change the wording to help it resolve the issue with little or no unexpected consequences. It’s a very good system when that happens.

Let’s take a very quick look at life-safety systems, as an example. Let’s imagine that purely by accident a house catches fire, is destroyed and a family is displaced. A tragedy by everyone’s terms. The question is, can we prevent this from happening? If money were no object, the answer is certainly “yes, we could prevent every home from burning to the ground.” It’s really no different than saying car makers could make it so drivers couldn’t crash into other cars – the technology clearly exists.

So we have house fires and we want to reduce them, which is a goal that everyone can agree on. The solution is simple, really – what cost is reasonable for the outcome.

You see, government could mandate that everyone have a fire extinguisher in their home. Small cost, reasonable safety, but house fires would still happen. Government could say we need smoke detectors in each home so people can get out safely. Small cost, excellent result: lives saved. Government could say we need to have a fire hydrant in front of each home so the fire department doesn’t have to take time to run lines down the street. Government could require there to be a fire station every 2 miles so fire trucks could get to every house within one minute.

We could go on and on, but you get the point. Somewhere down this path, the rate of returns diminishes. The cost for the safety outweighs the result.

The concern is now about whether the requirement of fire sprinklers in homes is worth the result. What would it cost to have every new home built with a fire sprinkler system and the annual inspection of the system, which must be required? Would the savings be worth the cost? Or are the new building codes of today strong enough to resist and contain fires that start in new homes?

I’m not suggesting answers here, you notice. But wait, those are new homes, what about older homes? In theory, those aren’t built to the same standards and are more likely to sustain more damage if they catch fire. Should we require retrofitting older homes with sprinklers? That’s even more expensive. And what would the results be?

Let’s not forget about commercial property. Questions are being raised today about “zero square foot” requirements. This idea says that all rooms, regardless of size, must have a sprinkler in them. Well, I know many buildings that have vestibules, an air lock room between the double set of doors. My office has one. Should we need a sprinkler in a room that has less than 100 square feet and no heating? It is enclosed by glass on three walls. What’s really going to start on fire in there? These are just questions we ask in meetings we have when discussing such issues.

Drafting legislation is not easy. There’s a dozen or more questions to be raised with every change we try to implement into anything. A politician has to become an expert in every topic, which is impossible, of course. We elect the best people we can, who can represent us and our best interests. They are all well-meaning people, as I stated.

So the next time you’re questioning your local officials, ask yourself how much you know about everything. And if you think you could do a better job, run for office. It’s your democratic right, after all. Until then, consider offering a hand or a solution.